Growth may continue to slow for the rest of 2024
The private sector credit’s growth in Australia slowed to 0.4% in May from 0.5% in April, which was slightly below expectations, according to a new report from ANZ Research.
Blair Chapman (pictured above), senior economist of ANZ and author of the report, said that both housing and business credit growth slowed last month, noting that overall credit growth has been relatively steady over the past year.
The numbers come after slowing from above-average growth rates after the COVID-19 pandemic.
Growth in housing credit grew by 0.4% in May from April and increased 4.6% from 2023, with owner-occupier housing credit growth slowing to 0.4% month-over-month from 0.5% month-over-month.
However, investor housing credit growth was steady at 0.5% month-over-month, Chapman said.
The owner-occupier housing credit growth rate in the past 12 months is at 5.2% year-on-year, while investor credit recorded a 3.5% growth.
The ANZ report also shows that business credit grew by 0.4% month-over-month in May, 0.2 points less than in April, but it grew 6.6% year-over-year.
In annual terms, however, the growth rate for business credit has slowed 7.2 points since its peak in October 2022.
ANZ noted that year-on-year over the last six months, it has been relatively steady at above 6%.
For other personal credit, growth has declined by 0.1% in May month-over-month, but there was still a 2.7% increase from 2023. Chapman’s report shows that this is the first decline in monthly personal credit for 2024.
According to Chapman, the upcoming cost-of-living relief measures and the stage 3 tax cuts could prompt personal credit to either decline further or grow more slowly over the rest of the year.
The 2024 federal budget covers measures that will help Australians face cost-of-living pressures.
The measures include new energy bill rebates for Australian families and some small businesses, as well as an increase to rent assistance payments, and changes to paid parental leave.
